Sierra Club and other groups question and protest TEP’s latest proposal on net metering solar energy, involvement with New Mexico coal plant

About 100 people protested TEP’s net metering proposal in front of its Tucson headquarters last week.

Andrea Witte feels like she's stuck in a solar energy limbo.

Over the past year, she and her husband have been reducing their electricity use at home to get a better estimate of how much it would cost to install rooftop solar panels. While they expect the expenses to be at least $20,000, the couple hoped to get back a big chunk of that investment in incentives over the next few years.

Witte no longer feels that way, largely due to a recent proposal by Tucson Electric Power to modify its net metering rules for solar energy—a regulation that requires TEP to buy back at full retail price any excess energy that a solar customer produces but doesn't use.

The utility company first filed its request with the Arizona Corporation Commission at the end of March, arguing net metering changes would equalize monthly rates for all residential customers. Most solar rooftops are connected to the communal electrical grid, and TEP argues the rooftop solar customers are not paying their share for maintaining the grid, and that non-solar customers have a bigger burden on their backs.

TEP withdrew that proposal in June, but plans to reintroduce it before the end of the year as part of its application for new rates, according to TEP spokesman Joseph Barrios. Essentially, if approved by the Corporation Commission, people who get rooftop solar after June 1, 2015 would get their savings cut by roughly $22 a month.

"TEP is not looking into the enormous investment of infrastructure that we have to put on our rooftop," Witte says. "We were looking at doing solar now, but I don't know what to do, because when you throw this in the mix, it makes it more complicated."

Even greater than the possible financial benefits solar could generate are the long-term effects in our environment, she says. And fewer incentives means fewer people will be attracted to solar.

"Monopolies don't want to change," she says. "They have so much power, it is cheaper for them to do the same dirty stuff than to reach over to something that will also create lots of jobs."

From the get-go, TEP's proposal was seen as an attack on solar by clean energy supporters like the Sierra Club, Tierra y Libertad, Sustainable Tucson and other environmental groups. Last Monday, they took their opposition to the streets during an early morning protest in front of the TEP headquarters in downtown Tucson, where about 100 people showed up.

"TEP has taken a pretty cynical approach to solar energy," says Dan Millis, program coordinator for the Sierra Club Grand Canyon Chapter. "They are trying to cut in half the amount of benefits that people who chose to go solar would get. What TEP is doing is destabilizing the solar marketplace and it makes it harder for people to take advantage of a very powerful resource we have here in Tucson, which is the sun."

Barrios says that TEP pays solar customers roughly double what the company would pay for energy from large community-scale systems. This is what ultimately increases the cost paid for by other customers, he says. He assures new solar customers will still see their investment flourish with the net metering changes, it's just that it'll take a little bit longer to see the financial gains.

"Customers are interested in supporting solar energy and seeing more renewable energy in our community, that opportunity is still available for them," Barrios says, pointing to a new residential solar program that rolled out in the spring (TEP would install rooftop solar panels at customers' homes without installation or maintenance costs. In exchange, people would pay a fixed monthly fee for the next 25 years), as well as a new program similar to the latter that will begin in 2016. "What we hear is that TEP should be doing more to support solar, and we agree."

Another issue currently haunting TEP is its involvement with the San Juan Generating Station—a coal-burning power plant in New Mexico. Sierra Club is among the entities demanding the utility company, which is San Juan's second largest owner, to pull out and solely focus on renewable energy opportunities (at the protest last week, critics used the chant "Sol Not Coal"). The environmental group says TEP's continuous relationship with the coal plant, also owned by the Public Service Company of New Mexico, is a financial risk to local ratepayers.

"The future of coal at the San Juan Generating Station has grown increasingly uncertain ... as more costs and challenges continue to arise," the Sierra Club said in a June statement. "PNM announced that the total bill for their plan to increase reliance on dirty coal and other expensive fuels had jumped by over $1 billion, with those costs likely being passed onto local ratepayers."

But PNM's Director for Integrated Communications Pahl Shipley told the Tucson Weekly in an email earlier this year that the $1 billion figure is a "miscalculation." He added PNM's plans for a net reduction in coal of about 50 percent for San Juan, and that, ultimately, where they are headed is the most cost-effective for its customers. Barrios says diverting from San Juan will bring "significant" higher costs to TEP customers, too.

He adds TEP is still working on plans to shut down San Juan's unit 1 by 2017, and making about $30 million-worth of environmental improvements on unit 2.

With merely 1 percent of the city's electricity coming from rooftop solar, Millis says we can do better. He argues Tucson still relies on coal for about 90 percent of its energy. Barrios begs to differ, saying last year, TEP's coal generation was 80 percent, and as of July 2015 it is down to 61 percent. He also wants to remind critics that TEP recently purchased a natural gas plant in Gila Bend, and that the company has reduced how much coal it receives from a unit in Springerville down to 50 percent.

PNM has until Aug. 1 to reach final ownership agreements. This will dictate who will own San Juan and for how long.

"This is a deadline that is looming and TEP has to decide whether or not they are going to continue their interest in the plant," says Nellis Kennedy-Howard, senior representative for the Sierra Club's Beyond Coal campaign. "Arizona is at the crossroads. Either dirty coal or clean energy."